Average house prices in Galway rose by more than 6% over the course of 2022, but began to fall in the last three months of the year.
As of Q4 of 2022, the average cost of a house in Galway County was €259,281, a 6.1% increase over the previous year.
In Galway the city the rise was more dramatic, with an 8% year-on-year rise in house prices to an average of €350,541.
However, both Galway County and Galway City recorded a slight decline in prices of 0.5% and 0.8% respectively in the final quarter of the year.
The national average for house prices by the end of the year was €309,941, an increase of 6.1% on 2021. But there was also a nationwide decline in prices in the final three months of the year.
Economist Ronan Lyons, who compiled the Daft.ie Irish House Price Report, said that this is the first time in two years that there has been any decline in the cost of housing.
“During the 2010s, a pattern emerged of what the academic literature calls a ‘cold’ market in the final three months of the year.”
“In each year from 2014 to 2018, encouraged by the calendar-year basis of the mortgage market rules and their exemptions, prices rose in each of the first three quarters but fell in the final one.”
“This seasonality was noticeably absent from the market between the middle of 2020 and the middle of 2022, when prices rose for eight consecutive quarters ‐ the longest run of increases going back to the start of the Daft.ie Sales Report in 2006.”
He attributed this to a slow but steady increase in the supply of housing, but warned that availability is still closer to the low point of the pandemic than pre-pandemic levels.
“Coupled with another 6% increase in the average listed prices, this suggests that, at least over the course of 2022, demand has remained strong.”
“But what will 2023 bring? There are reasons to think that demand has started to cool off, following an unprecedented couple of years.”
!On the one hand, interest rates have risen. One mortgage market provider started the year with fixed rates below 2% but will enter the new year with rates for the same product of almost double that.”
“This mathematically filters through to affordability and the maximum loan a provider will lend,” Ronan Lyons said.
He added that 2023 may see Ireland come the close to achieving balance in the property market, as supply recovers and demand becomes more uncertain.
